Wednesday, September 10, 2008

How Zappos.com Builds Customer Loyalty

Like any typical consumer, among my most frequent encounters with successful training are conversations with adept, helpful customer service representatives (CSRs). (Of course, I've also had my share of disappointing and frustrating encounters with poorly trained and/or poorly guided CSRs.)

Well-trained CSRs are the name of the game at zappos.com, an Internet retailer specializing in shoes, but also offering clothing, handbags and luggage of all types, and accessories.

One recent account of Zappos' approach to building customer loyalty  a key to long-term financial success in Internet retailing  is provided by a May 2008 blog post at the website of Harvard Business Publishing. Bill Taylor cites Zappos as a standout for original thinking, steadfast execution of its business strategy, which centers on customer service excellence,1 and transparent thinking.

The specific focus of Taylor's post is Zappos' successful use of its employees as, in effect, brand ambassadors. Based both on reports of others and on his own direct observation at the Zappos call center in Henderson NV, Taylor explains that Zappos' "smart and entertaining call-center employees are free to do whatever it takes to make you happy. There are no scripts [for the CSRs to read from], no robotic behavior, and plenty of legendary stories about Zappos and its customers." (You can read one such story here.)

The superior performance of Zappos employees in building customer loyalty is largely due to careful selection for cultural fit, and to training "that immerses them in the company's strategy, culture, and obsession with customers."2 The training extends over four weeks, three of them in the classroom, followed for CSRs by a week of guided call-handling at the call-center.

After the first week of training  during which trainees receive an entry-level salary  they are offered $1,000 to walk away from the job. The thinking is that the company needs to weed out people who aren't really drawn to the CSR job as defined in the Zappos culture (what I would call people who lack the requisite critical caring). About 10% of new CSRs accept the offer.

You can learn more about Zappos' approach to its business by reading CEO Tony Hsieh's "Top 10 eCommerce Lessons" and by watching the video below, which presents an interview with Hsieh.

__________1 For example, in a departure from the practice of many Internet retailers, Zappos publishes its 800-number on every one of its webpages.

2 A basic component of Zappos' culture is its set of ten core values, which you can read here.